Offshore Tax Havens – Say Hello To The Tax Man

Corporations munching on taxpayers

Death and taxes are the two main constants in life. While most of us worry when April 15th comes a knockin’, the corporate CEOs take the Bobby McFarrin approach – Don’t Worry, Be Happy. The reason for this laid back attitude when it comes to paying the tax man is that they’ve got their money stashed in tax friendly places like the Cayman Islands and Bermuda. Senator Bernie Sanders (I-VT) and Representative Jan Schakowsky (D-IL) plan to put an end to it all. Today they introduced in their respective chambers the Corporate Tax Dodging Prevention Act.

According to figures that Sanders used from the CBO, if just 29 top corporate CEOs were forced to repatriate their earnings back to the U.S., the federal government would stand to rake in over $128 billion in tax revenue. That revenue would come from monies in excess of $395 billion stashed away by companies. If you take into account the Fortune 100 companies, there’s over $1.7 trillion hiding in tax havens. How do companies do this while the rest of us have to sweat it out every April?

 

Top Fortune 100 Companies tax havensOne of the ways that corporations do that is through a loophole that allows companies to stash the money for as long as they like. As long as the money stays elsewhere, no taxes need to be paid. The bills that Sanders and Schakowsky are introducing closes that loophole. The second reason for this is a tax deduction that actually encourages companies to ship jobs overseas. Companies can write this off on their taxes due to costs that are incurred. While this makes sense if the company were in the U.S., it doesn’t make sense for use elsewhere. Not only are jobs lost with the company, but there’s also a ripple effect. Money that would have been paid for construction, utilities, and countless other feeder jobs and associated revenue to smaller companies is lost.

For the average person, these amounts are dizzying. So you may ask, ‘What does this mean to me?’ Besides the loss of revenues for the federal government, state and local governments lose out too. The result is you and I have to make up for those lost revenues. According to estimates by the New Mexico PIRG or the New Mexico Public Interest Research Group, the average taxpayer in New Mexico would have to pay an extra $206 in taxes. That’s nothing for a huge corporation, but that’s a lot for a family struggling to put food on the table. If put in terms of the cost for small business, it’s an extra $1,106 in taxes that they’ll have to pay to make up for loss in taxes.

It’s true that this legislation has a tough fight ahead. However, the fight may be less difficult this year as compared to last. People are starting to wake up and realize that even though they are a small fish in the sea with some very large fish, we learned that if we work together to pressure our legislators, we can make progress. If successful, these CEOs will no longer be whistling ‘Don’t Worry, Be Happy’, but instead the Beatles medley ‘Tax Man’.

Things That Appall Me

Pro Right-to-Work wingnut Walker supporter, Diane Hendricks, star of the now-famous video where Walker declares his intent to “divide and conquer,” paid no corporate income taxes in 2005, 2006, 2007 and 2008.

During a three-month period in 2012, Hendricks donated $500,000 to Walker’s campaign, according to the Wisconsin Democracy Campaign. She is the largest single donor to the governor’s anti-recall campaign, outspending even fellow billionaires Sheldon Adelson (Las Vegas casinos) and Richard DeVos (Amway).

Hendricks, whom Forbes magazine says is worth $2.8 billion, heads Beloit-based ABC Supply Company, which the magazine calls “the nation’s largest roofing, window and siding wholesale distributor” with annual sales approaching $5 billion. ABC Supply may be a huge money-maker for Hendricks, but the Wisconsin corporate income tax returns she files claim the company makes not a penny in taxable profit.

ABC Supply paid exactly $0.00 in state corporate income tax in 2005, 2006, 2007 and 2008, according to the state Department of Revenue. Tax data for more recent years were not available when the information was requested from the department.

I’m appalled.

Is He Lying or Stupid?

Paul Ryan (R- Wall St.) likes to tell anyone who will listen that we have the highest (or second highest) corporate tax rate in the world.

H/T Bob Cesca:

The United States actually has the second LOWEST corporate tax rate in the world.

Ryan may actually be telling the truth, if it weren’t for the countless number of loopholes corporations use to avoid paying the majority of their taxes or, in some cases, pay no taxes at all. The only way people like America’s account Paul Ryan says they will agree to closing some of those loopholes is if they are offset by tax-cuts in other areas. This is what he calls being \"revenue neutral\".

So the question I have is when Paul Ryan goes on TV and says what he says is he lying or just has not done the research to find out the truth. If he is lying, will he end up with the same fate as Anthony Weiner or Roger Clemens?